performance fee

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Incentive Fee

A fee paid to an asset manager or other investment adviser whose investment decisions perform particularly well. When an asset manager makes money for clients, he/she also makes money for the company for which he/she works. These companies offer incentive fees in order to encourage wise (and profitable) investments. Incentive fees usually come out of the portfolios that do well, rather than out of the company's general funds. They are also called performance fees. See also: Bonus, Manager Universe (Benchmark.)

performance fee

A fee paid to an investment manager based on the performance of a client's portfolio, determined by a specified standard. For example, an investment manager might be paid a regular fixed fee plus an incentive fee based on the change in value of the client's portfolio. Also called incentive fee.
References in periodicals archive ?
Under the investment management agreement dated 14 December 2006, a performance fee is payable based on outperformance of the Company's benchmark index if the Company's NAV reaches a high watermark of 55.
There are those who say you can always fire a manager, and that's the ultimate performance fee.
Our performance fee is on a rolling three-year basis, to be settled up at the end of each year.
Another performance fee variation is that a manager must equal the S&P 500 return plus 150 basis points in order to earn his standard fee.
There are those who say that if managers are put on performance fees, they'll take more risks.
Certainly, if performance fees become a norm, it's going to change the way investment management firms operate their business.
Global Investors includes management fees that are received and recorded monthly and an annual performance fee, if warranted, that would be paid in the fourth fiscal quarter that ends June 30, 2007.
Based on information released by Endeavour, for the first six months of fiscal 2007, the performance fee to date accruing to U.
Global Investors, the performance fees are calculated and recorded only once a year at the end of the fiscal year in accordance with the terms of the advisory agreement.
BOSTON -- Evergreen Investments today announced plans to implement a performance fee for Evergreen Large Cap Equity Fund (NASDAQ:EVSAX).
Effective December 1, 2005, the implementation of the performance fee will result in the current effective management fee being reduced from 0.

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